Airtel Critiques India's Telecom Pricing Model Amid Sluggish ARPU Growth
Airtel says India’s telecom pricing model is ‘broken’ as ARPU growth slows
The Economic Times
Image: The Economic Times
Bharti Airtel's management has expressed dissatisfaction with the slow growth in average revenue per user (ARPU), which fell to ₹257 in Q4. They attribute this to a flawed pricing model reliant on unlimited data plans and are advocating for a shift to a tiered pricing structure to enhance revenue growth.
- 01Airtel's ARPU decreased by 0.6% to ₹257 in the fourth quarter.
- 02Management cites a broken pricing model as the reason for slow ARPU growth.
- 03A shift to a tiered pricing structure is proposed to boost ARPU.
- 04Airtel plans to increase capital expenditure on fibre infrastructure and 5G capabilities.
- 05The company aims to enhance post-paid penetration and encourage upgrades among users.
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Bharti Airtel's management has voiced concerns over the stagnant growth in average revenue per user (ARPU), which fell 0.6% to ₹257 in the fourth quarter. Chief Executive Shashwat Sharma highlighted that the current pricing model in India is 'broken,' heavily relying on unlimited data plans that limit revenue potential to around ₹340-350, significantly lower than in Western markets. To address this, Airtel proposes a shift towards a usage-based tiered pricing structure, allowing customers to upgrade based on their consumption. The company plans to leverage existing growth levers, including increasing post-paid subscriptions and enhancing fibre broadband services. Additionally, Airtel is investing in its 5G network and exploring new growth areas such as data centers and financial services, aiming to future-proof its business.
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If Airtel successfully shifts to a tiered pricing model, consumers may see better alignment of pricing with their usage, potentially leading to more tailored plans and improved service quality.
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